Disposals Account

jewels.p

Can anyone help.

Vehicle Cost = 8000
Prov.for depn. = 4625
Part Exchange allowance given = 2000

I calculated a loss of £1375. Is this right?

It then asks you to calculate the cost of the replacement vehicle. I dont have a clue?:confused1:

jewels.p

Oops just realised it tells you in the Bank Account Summary that 7500 was paid out for a replacement vehicle. Never saw that at first.:blushing:

magic_ghost

The way i calculated it was:

Fixed Asset Cost: 8000
Less: Accumulated Depreciation: (4625)
Net Book Value: 3375
Less: Disposal Proceeds (2000)
Loss on Disposal: 1375

mally

jewels.p wrote: »

Can anyone help.

Vehicle Cost = 8000
Prov.for depn. = 4625
Part Exchange allowance given = 2000

I calculated a loss of £1375. Is this right?

It then asks you to calculate the cost of the replacement vehicle. I dont have a clue?:confused1:

DR Disposal a/c £8000
CR vehicle a/c £8000

DR prov for dep a/c £4625
CR disposal a/c £4625

DR vehicle a/c £2000
CR disposal a/c £2000

DR I/S a/c £1375 (loss on disposal)
CR disposal a/c £1375

The balance on the disposal a/c is the profit or loss on disposal (£1375) and the corresponding DE is recorded in the I/S.

any2002uk

so that the part exchange total is now
£1500

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cost

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part exchange £2000// disposal 8000
bank £7500//

bal=========1500

i hope it is correct?